Fast-growing ME Group – a dispute resolution business which encompasses a claims management company and legaltech offering – has agreed terms to buy litigation finance firm Quanta Capital.
Quanta, which will operate as a stand-alone business within the group, has a focus on SME disputes which require funding of between £250,000 and £2.5m, and matrimonial disputes involving high net-worth clients.
Rather than taking a share of any proceeds, it charges fixed monthly interest for the rolling amount borrowed, but typically deferred to the end of the case.
A facility fee is also added to the loan, but it is backed with after-the-event insurance to make it risk-free for the firm or client.
The ME Group describes itself as “a legaltech provider of litigation funding, insurance and legal representation for consumers facing complex legal problems”.
Last year, Legal Futures reported on how it was generating mortgage mis-selling claims and also helping law firms enter the field to handle them.
The group was set up by non-lawyer managers from Liverpool law firm High Street Solicitors. It only opened for business in September 2017 but has grown very fast.
Interim results for the six months to September 2018 recorded profit before tax of £1.2m on a turnover of £6.2m. EBITDA was £1.26m.
By comparison, for the previous 15 months – January 2017 to March 2018 – profit was £930,000 on a turnover of £5.85m. EBITDA was £1.1m.
Chief executive Rob Cooper said: “We anticipate that Quanta Capital will be a significant driver of growth within our portfolio of dispute resolution services.”
Simon Dawson, managing director of Quanta, will join the ME Group board. He previously worked at National Accident Helpline Group, Slater Gordon Solutions and HCML Healthcare Services.
Mr Cooper said ME intended to invest in Quanta “to accelerate its rate of growth and launch a number of new service offerings”.
He added that further moves to “increase our presence along the dispute resolution value chain” were planned for the coming months.